Govt buys a record volume of soybean at MSP as prices rule below benchmark
The government’s soybean procurement under MSP is set to exceed 1.7 MT, a sharp rise from 70,000 tonnes last year. Maharashtra and Madhya Pradesh led purchases. Prices remain below MSP due to global soymeal declines. Import duties on edible oils were raised to support domestic production, while procurement of pulses under PSS has also begun.
Just a week left for the government’s market intervention programme to conclude, the agencies — Nafed and NCCF have purchased a record volume of 1.63 million tonne (MT) of soybean across six states from farmers under the minimum support price (MSP) operations.
Sources told FE that overall purchase from the farmers of soybean, a key oilseed variety, in the current 2024 kharif season is expected to cross 1.7 MT after the kharif purchase operations concludes next week.
In the 2023 kharif season, agencies purchased only 70,000 tonne of soybean from farmers at MSP.
Out of six states where the government agencies purchased soybean, Maharashstra (0.78 MT), Madhya Pradesh (0.62 MT), Rajasthan (80,994 tonne) and Telangana (83,075 tonne) contributed the significant quantity. Currently oilseed purchase under price support scheme (PSS) of the agriculture ministry will being carried out in Maharashtra, Rajasthan and Gujarat.
The record purchase of the oilseed variety is part of the government’s aim to procure oilseeds and pulses at MSP from farmers targeted at boosting output of these commodities and reducing the country’s import dependence.
Sources said ‘the average mandi price of soybean currently was just below the MSP of Rs 4,892/quintal announced for the 2024-25 season (July-June) due fall in global soymeal prices.
The glut in global supplies has hit domestic prices as a chunk of soybean, with only 18-20% oil content, is used as animal feed. The ex-factory (Indore) prices of soymeal, widely used as poultry feed, declined to Rs 2800/quintal on Tuesday from Rs 4150/quintal prevailed at the beginning of the year.
In September, last year when mandi prices were below the MSP due to surge in import of edible oil because of import duties, the agriculture ministry had approved the purchase of 3.22 MT of soybean from farmers in Madhya Pradesh (1.36 MT), Maharashtra (1.3 MT), Rajasthan (0.29 MT), Karnataka (0.1 MT), Gujarat (0.09 MT) and Telangana (0.05 MT) under PSS.
In the last rabi season, despite having a record mustard production of 13.16 MT in 2023-24 crop year (July-June), the mandi prices were ruling below the MSP and the government agencies had purchased 1.2 MT of mustard from the farmers in key producing states of Haryana, Madhya Pradesh, Rajasthan and Uttar Pradesh.
Effective from September 14, the government raised import duties on crude palm, soybean, and sunflower oils to 27.5% from 5.5%, while duties on refined edible oil rose to 35.75% from 13.75% aimed at boosting domestic production as the country imports about 58% of its edible oil consumption of 24-25 MT annually.
MSP purchase of pulses commences
Meanwhile, NCCF has commenced purchase of tur dal under the price support scheme of the agriculture ministry from Karnataka after a gap of two years are prices of key pulses are ruling below MSP. Officials said purchase of tur dal, whose prices for the last two years were ruling atleast 30% above the MSP, will commence in Maharashtra and Karnataka next.
The agriculture ministry has also approved purchase of 96,498 tonne of begal gram, a substitute of chana under PSS in Karnataka.
With the prospects of robust harvests and declining trend in prices, the government is aiming to aggressively commence procurement of pulses varieties – tur, urad and lentil, through — PSS and price stabilisation fund (PSF) from farmers shortly.
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Source : Financial Express
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